How Aging and Memory Loss Affect Finances

Posted on: September 29th, 2015

While not all aging Americans experience cognitive decline, it nevertheless is becoming more prevalent among the elderly. Currently, an estimated 5.1 million people over age 65 suffer Alzheimer’s. According to the Alzheimer’s Association, this number will increase 40 percent over the next decade. Understanding the effect that degenerative cognitive diseases can have on one’s ability to care for oneself can help individuals, couples, and families as a whole prepare for a loved one’s possible memory loss.

Alzheimer’s is known for taking an emotional and psychological toll, both on the person experiencing cognitive decline and on their close family and friends. A senior suffering from memory deficiencies faces several financial risks that can be addressed in advance with an elder law attorney:

Special care. Individuals with dementia or other cognitive issues generally require focused treatment. They might not be able to manage their personal care on their own, and they could be prone to wandering and forgetting where they live. Nursing homes or adult care facilities that cater to Alzheimer’s residents generally offer staff that have completed specialized dementia care training, wander prevention systems, and planned activities that fit in the scope of the resident’s abilities. According to AARP, memory care facilities can cost in excess of $100,000 annually, which is more than 20 percent higher than North Carolina’s average nursing home cost.

Potential fraud. Someone close to the senior might take advantage of their finances, or they could become the victim of a larger-scale scam targeting the elderly. Without full mental faculties, an elderly person might agree to a fraudulent investment scheme and sign over assets or deplete bank accounts. To help prevent fraud, planning in advance for a loved one’s senior years might involve re-titling assets or adding bank account restrictions. Assets can be held in trust for the benefit of the senior, and checking accounts can be altered to require two signatures for transfers, withdrawals, or checks over a specific amount.

Crisis plan. Addressing a family crisis without a plan is particularly stressful and emotional. Reviewing potential crises with an elder law attorney can help create a solid legal plan in advance that will ensure the care of the senior while minimizing the stress for all involved. An individual’s fading capacity could be unreliable in a crisis, and the person who requires care might not be in a mental state to contribute to decisions about their treatment. Planning in advance can help to ensure that a loved one’s wishes are discussed and measures put in place to address those wishes and alleviate stress and uncertainty for all parties.

When trying to prevent financial problems for an aging relative, help them to identify and organize critical documents before they are needed. Ensure powers of attorney and advance directives are up-to-date. Although not required, North Carolina’s Advance Health Care Directive Registry can be a helpful place to register a loved one’s documents. Encourage an aging relative to keep their will current and accessible. For documents kept in a safe deposit box, it might be helpful to add a trusted person as a co-signer on the box to expedite access. Learn more about accessing a safe deposit box in North Carolina here.